Yang Yang

    yyunfei@yahoo.com

    TWO listed units of Sinochem Group said yesterday that a possible merger of Sinochem Group and China National Chemical Corp., as reported by foreign media Friday, was not true.

    Cangzhou Dahua Co. said in a statement that its controlling shareholder Sinochem Group had not obtained any information from related government agencies about the reported merger and the parent had not expressed such intent to any government agency or firm to do so.

    Jiangsu Yangnong Chemical Co., another Shanghai-listed unit of Sinochem, also issued a similar statement yesterday.

    Bloomberg and Reuters quoted unnamed sources as saying Friday that China is planning to merge Sinochem Group and China National Chemical Corp. (ChemChina) to create an oil-to-chemicals giant as part of the government’s overhaul of its State-owned enterprises

    The prospective merger, combining two companies with assets of more than US$100 billion, would create the largest oil refiner behind China Petrochemical Corp. and China National Petroleum Corp., Bloomberg said.

    Reuters quoted the sources as saying that the Central Government orchestrated the deal as part of its efforts to cut the number of State-owned companies and create larger, more competitive global industry players.

    Both Sinochem and ChemChina are overseen by the State-owned Assets Supervision and Administration Commission, which is the body in charge of government-controlled firms.

    Shares in the two companies’ listed subsidiaries jumped on the news Friday, with Sinochem International Corp. climbing by the 10 percent daily limit for its biggest one-day rally in a year and Sinofert Holdings Ltd. rising 6 percent. Cangzhou Dahua rose 4.99 percent and Jiangsu Yangnong advanced 3.58 percent.